Hero Honda, Honda Motorcycles may share technology, know-how

Japanese two-wheeler maker Honda and its Indian partner, the Hero group, want to leverage their 25-year-old partnership to perform better in the Indian market, says a Business Standard report.
Both the companies had posted robust numbers in 2008, despite the slowdown in the domestic market.

Honda Motorcycle and Scooter India (HMSI) had sold more than a million units in the domestic market for the first time, recording a growth of 16.5 per cent.
The Indian company has said that it foresees a growth of 18 per cent this financial year, with sales of 1.2 million units in India.

HMSI is today the country’s fourth-largest two-wheeler maker and has already helped Hero Honda Motors (HHML) in areas like design and styling for a couple of products.

HMSI hopes to increase its growth in the motorcycle segment by 25 per cent by 2010. It plans to launch five new motorcycles soon.

As of now, HMSI and Hero Honda Motors share a supply chain and production capacity details.

Since both companies operate in the two-wheeler and motorcycle segment, Honda and HMSI have been eating into each other’s market share to some extent. With the partnership growing both the companies could save through sharing technology and better production management.

Honda Motors, which started with selling scooters, moved into the motorcycle segment with the launch of the 150-cc Honda Unicorn, in 2004.

Honda Motors first entered the Indian market with the launch of its 100cc Honda Activa. As of now, Honda’s portfolio in the Indian market includes the 125cc Honda Shine, ther 150cc Honda Eterno, the Honda Dio, and the Honda Aviator.

Business Standard quoted Shinji Aoyama, president and CEO, HMSI, as saying, “We enjoy a very positive association with Hero Honda. We shared the basic vehicle design with them for their new CBZ and Hunk (motorcycles). We may look at sharing engines or platforms in the future but there are no confirmed plans yet.”

Hero Honda controls 70 per cent of the entry-level motorcycle market, those with engine capacity above 75 cc but less than 125 cc.

The company has said that it may do a Nano, and come up with a new motorcycle that will be affordable but without compromising on either durability or performance.